How can I tell whether a new business model will work?

Founder problem

Will this new business model work?

Before you sign the lease, build the app or launch the offer, test its assumptions. Research on small-business model change, with two case studies.

What is usually going on

A new model usually rests on a few assumptions—who will buy, at what price and at what cost to deliver—that look reasonable but are untested. The risk is committing money and hours before the cheapest test has been run.

Read with the book

Chapters 2–3 (noncustomers and testing the offer) and Chapter 4 (the PMS Map). The Founder’s Trap →

What the research says

Studying Australian small firms after the first COVID-19 lockdown, the researchers found resources at hand were necessary but not enough; partnering, experimenting and limiting losses to what the firm could afford, in combination, were most strongly related to redesign.Limits: Qualitative, a small number of firms, during a crisis.de Villiers Scheepers, M. J., Gronum, S., Cranney, S. & Tracey, N. (2025). Business model redesign through effectual action in times of crisis. Journal of Small Business Management, 63(3), 1106–1142.Read the research →

More studies, with their limits, are on the Research & Evidence page.

Cases to read

Fictional caseSam’s Coffee KioskA roadside kiosk and pre-order app, and what must be confirmed before either is built.Read the summary →

Researched caseKoalaMaking a remote mattress purchase credible, and what the promise cost to keep.Read the summary →

Your next step

If this sounds like your business, a Snapshot Review (A$249, including the book) provides an independent view of how your business fits together, where pressure is concentrated, and what to test first. It is delivered within two business days of receiving your Intake Form.

Explore the Snapshot Review

General information and educational insight only; not financial, legal, tax, strategic or professional advice.